Friday, August 19, 2005

Texas eminent domain bill: "The implications will have long-term impacts."

Eminent domain goes to governor: A look at what’s in the bill

8/19/2005

by James A. Bernsen

Volume 10, Issue 3The Lone Star ReportCopyright 2005

The eminent domain bill finally made its way through the Legislature and onto the Governor’s desk.

The long-delayed passage this week of SB 7 by Sen. Kyle Janek (D-Houston) – prohibiting the public taking of private property for economic development – nonetheless proved that this Legislature can’t even pass consensus bills without major headaches and last-minute wrangling.

The final version ostensibly returns the state to the status quo before the U. S. Supreme Court’s oft-derided Kelo vs. New London decision, affirming New London, Connecticut’s right to pursue economic development by taking private homes through eminent domain. But the implications – and potential for future debate over eminent domain – will have long-term impacts.

SB 7 sailed out of the House and Senate last week after Gov. Rick Perry put it on the special session call. Opponents were few but vocal, and this week attempted to delay the bill even longer as the Senate debated concurrence with House amendments.

First, the vote was delayed a day in the Senate after Sen. Mario Gallegos (D-Houston), pointed out that there was not a quorum on the bill. He was urged on by Sen. John Whitmire (D-Houston), who shouted “point of order” to Gallegos.

The next day, Aug. 16, Gallegos decided to filibuster. With four days left in the session, however, Lt. Gov. David Dewhurst wasn’t buying it.

“With all due respect, I was out on the trail jogging yesterday and the day before and the day before that, and I did not see Sen. Gallegos out there jogging at the same time I did,” Dewhurst said. “I just don’t know how long that Sen. Gallegos is going to want to talk today.”

Gallegos didn’t even last two hours, and later that afternoon, the Senate concurred 19-5. Voting no on the bill were Gallegos, Whitmire, Rodney Ellis (D-Houston), Eliot Shapleigh (D-El Paso) and Judith Zaffirini (D-Laredo).

What’s in the bill

The House won on its provisions in the bill, by adding its amendments to the Senate plan and getting them rubber-stamped. Because of the time frame of the session, Janek couldn’t have taken amendments if he had wanted to, because any delay would have pushed the bill into conference and likely killed it.

LSR has discussed many of these bill provisions in depth in past issues. Here, in summary, are the key provisions:

* The bill applies to local governments, universities and the state. The original legislation left out the state, but it has been included since midway through the first special session. It also applies to corporate entities, water districts, and any other entity acting on behalf of a governmental entity.

* The bill contains a list of “traditional” eminent domain uses that are allowed. Although the list is not exhaustive, those chosen were added to preclude any legal arguments against those traditional uses.

* Eminent domain that creates an economic development as a secondary result, such as rehabilitation of a “slum or blighted area,” is not prohibited.

* Statements by governmental representatives that the purpose of a particular process is not for economic development do not create a presumption of fact; only a court determination of fact would stand.

* The bill prohibits universities from building “lodging facilities” through eminent domain. Zaffirini sought clarification for purposes of legislative intent on this issue.

The bill, Janek explained, would not prohibit the building of dormitories or of parking for dormitories. Nor would a building be considered a “lodging facility” if it was for students – whether long-term or short-term students taking a class. Therefore, if the University of Texas at Austin – which was until recently planning to use eminent domain to build a parking garage for a hotel project – would choose to build a parking garage for student housing instead, the bill would allow it. Building a facility for student parking then “swapping out,” however, could fall afoul of a provision prohibiting the use of routine eminent domain as a “pretext” for economic development.

Stadium issue

One of the key portions of the bill deals with sports stadiums. Projects already in the works – including a new stadium for the Dallas Cowboys in Arlington – are exempted. No others are. Any new stadium built in the future would be subject to such restrictions on eminent domain.

Under pre-Kelo eminent domain rules, a stadium could still be built, but the local governmental entity (city or county, in most cases) that used the powers of eminent domain would still have to retain ownership of the facility, and not convey any portion of that facility to a professional team.

The language of the bill, however, may go beyond that and could potentially be used to prohibit any stadium development through eminent domain. The bill prohibits the use of eminent domain for a purpose that “confers a private benefit on a particular private party through the use of the property.”

The language, of course, says “use” not “ownership,” a point that could well end up as an issue in a legal case.

It remains to be seen how much that would limit the future negotiations for a professional sports franchise. The Dallas and Houston areas already have new baseball, football, and basketball arenas. San Antonio has a new basketball arena, but if a future NFL expansion wanted to come to the city and wanted to pass on the 12-year-old Alamodome, its options may be limited.

Future of eminent domain

The initial legislation filed on eminent domain included a constitutional amendment, but in the process, that attempt was dropped. Therefore, any future legislature can undo or change the language of SB 7. While the passage of a bill, instead of a constitutional amendment, doesn’t set restrictions on eminent domain in stone, it also allowed the legislature out of an all-or-nothing corner.

Members with side issues – such as Rep. Harold Dutton (D-Houston), who wanted to pay replacement costs for homes taken – can hold out for the future. To that end, SB 7 includes a study of eminent domain itself. Additionally, Dewhurst said he intends to form an interim committee to review the results of that study and bring recommendations back to the Legislature in 2007.

“I think it’s going to address the more liberal leaning of the [U. S.] Supreme Court in their definition of what a taking is,” said Dewhurst, of SB 7. “I believe that here, under Texas law, we have a more conservative view, and so I believe that this bill moves in that direction.” O

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